Options Trading

Diagonal option spreads is yet another kind of option trading strategy, that aims to shift the odds more in our favour. Generally diagonal spreads can have a better risk / reward ratio than any other strategy. Particularly in cases where you consider writing naked options, it might be possible to replace the whole naked option writing idea with a safer diagonal spread.......read more

Options’ trading offers the opportunity to investors, to fully protect their long stock portfolio, using what is known as a Costless-Collar strategy. The idea is to provide hedging on the long stock held, without paying a net premium for it!.....   read more

Option spreads are trading strategies involving taking both sides of an option trade, but in such a way as to achieve an overall lower risk / reward ratio than standard, outright option purchases. Generally, there are two types of spreads, Horizontal and Vertical. Horizontal means that we pick 2 option contracts,.....   read more

The Bull Put Spread is one of the easiest spreads to understand, yet it is one of the most profitable option trades. As we know a spread trade can always be better than a lame outright option trade!.....   read more

As we all know, the passage of time affects the premium of options, particularly the OTM options, the less an option is ITM the more the factor of time decay matters (The Theta metric) we know that this time decay accelerates....   read more

The simplest way to make a smooth transition from stock trading to options trading, is to implement a straightforward, directional stock trading strategy, based upon your existing stock trading system, the only real reason you prefer options trading in this case, is because you can take advantage of the asymmetrical behaviour of Delta. That is what allows you to win $1,000 from a given stock price move, and only lose $700 if you are wrong and incur the same stock price trend on the losing side.